EDITORIAL: The future of nuclear energy in Australia

A country with a critical balance of payments deficit and a huge foreign debt can hardly afford to deny itself the financial benefits flowing from an expansion of mineral exports.

On June 6, the Prime Minister announced the establishment of a task force to conduct a comprehensive review into the future of the nuclear industry in Australia, covering uranium mining, uranium enrichment and the future of nuclear power.

In light of soaring prices of oil, coal and uranium oxide - the main sources of energy - such an inquiry is long overdue.

As a result of a veto imposed by environmentalists and Aboriginal activists on Labor governments, the expansion of Australia's uranium industry has been restricted since the 1970s, and most new uranium mining projects have been stopped in their tracks.

The other matters to be examined by the nuclear energy inquiry are more complex, and refer to matters of less immediacy, even if in the long-term they are of considerable importance - including uranium enrichment and reprocessing, and the competitiveness of nuclear power reactors.

However, as neither Australia's Government nor the Opposition has shown much interest in the viability of Australian manufacturing industry, preferring the easy alternative of buying cheaper imports from overseas, it is hard to believe that any recommendation of the inquiry in these areas will be taken seriously.

Mineral output

Despite the restrictions on production, Australia is currently the world's second largest producer of uranium oxide behind Canada.

Australia's uranium is sold strictly for electrical power generation only, and safeguards are in place to ensure this. Australia currently supplies uranium oxide to the United States (where nuclear power provides 20 per cent of the country's electricity), Japan (30 per cent), South Korea (40 per cent), France (77 per cent), UK (20 per cent), Sweden (50 per cent), and Germany (30 per cent).

In announcing the inquiry, Mr Howard noted that "recent developments in global energy markets have renewed international interest in nuclear energy as a technology that can help meet growing demand for electricity without the fuel and environmental costs associated with oil and gas. This also comes at a time when energy prices and energy security are key considerations for future economic growth in a lower emissions future".

The price of uranium oxide has increased six-fold since 2001.

Mr Howard also noted that a growing number of environmentalists now recognise that "nuclear energy has several other advantages over fossil-fuel electricity generation, including significant lower levels of air pollution and greenhouse emissions".

Australia has some 40 per cent of the world's known reserves of uranium ore, but the development of uranium mines in Australia has been severely restricted as it requires the approval of both state and federal governments: the states control mining, but the Federal Government controls export approvals.

There are currently three uranium mines operating in Australia: the Ranger mine in Arnhem Land (in the Northern Territory), the Roxby Downs copper-gold-uranium mine in South Australia, and the small Beverley mine in outback South Australia.

These are low-cost mines, and have been expanded to meet growing demand for uranium oxide, a low-value raw material used for the production of enriched uranium which fuels the world nuclear power stations.

However, a string of uranium deposits around the country have been blackballed by state and territory government vetoes. These include the rich Jabiluka and Koongara deposits in the Northern Territory; the Honeymoon and Billeroo West deposits in South Australia; the large Kintyre, Yeelirrie and Mulgra Rock deposits in Western Australia; and the Westmoreland, Valhalla and Ben Lomond deposits in Queensland. As things stand at the moment, state Labor Governments have prevented the establishment of any new uranium mines.

The new federal inquiry will have to find ways to deal with these, in the national interest. At the moment, a coalition of environmentalists associated with the Australian Conservation Foundation and Aboriginal activist groups have a stranglehold on public policy.

In light of the fact that uranium has been safely mined for decades in Australia, and that Aboriginal Australians have been beneficiaries of mining operations, the current veto on new mines is intolerable. Until this is changed, there will be little action on the ground.

The line taken by the federal Opposition leader, Kim Beazley - that the Australian Government should be concentrating on renewable energy sources such as wind and solar power - is both bizarre and irrelevant given that Australia's uranium is being supplied to electricity utilities in the northern hemisphere.

One can only conclude that Mr Beazley is happy that Labor's policy is being determined by vociferous minority groups on the fringes of the political process.

Even if no other considerations are taken into account, a country with a critical balance of payments deficit and a huge foreign debt can hardly afford to deny itself the financial benefits flowing from an expansion of mineral exports.